Mike Novogratz

Fidelity will ‘shift’ retail customers into crypto soon — Galaxy CEO

While Fidelity hasn’t yet confirmed rumors it will launch retail Bitcoin trading, the firm said enabling broader access to digital assets remained a key area of focus.

$4.2 trillion asset management firm Fidelity Investments is reportedly working toward offering Bitcoin (BTC) trading services to its 34.4 million retail investor base, according to Galaxy Digital CEO Mike Novogratz and people familiar with the matter. 

While Fidelity hasn’t officially confirmed plans to incorporate crypto onto its retail platform, Novogratz told a conference audience in New York on Tuesday, that the move may be just around the corner:

“A bird told me that Fidelity, a little bird in my ear, is going to shift their retail customers into crypto soon enough.”

“I hope that bird is right. So we are still this institutional march and that gives crypto its floor,” he added.

Novogratz isn’t the only person to have signaled the potential move from Fidelity. The Wall Street Journal (WSJ) on Tuesday noted that Fidelity is currently “weighing a plan” to allow individual investors to trade Bitcoin on its brokerage platform.

A similar note was shared by Eight Global Founder and CEO Michaël van de Poppe last week, suggesting that the platform will launch Bitcoin trading for retail customers in November.

Fidelity in a Tuesda statement addressed the rumors, noting:

“While we have nothing new to announce, expanding our offerings to enable broader access to digital assets remains an area of focus.”

Fidelity Investment has been an active investor and playmaker in the crypto space, fueled by a growing demand from clients to access crypto investment opportunities.

Fidelity started mining Bitcoin in 2015 and launched a Bitcoin-trading business for hedge funds and institutional investors in 2018.

In April, Fidelity also began allowing its 401(k) retirement savings account holders to invest directly into Bitcoin, though this was later met with pushback from three United States senators including Senator Elizabeth Warren, who called the launch of the Bitcoin product to be “immensely troubling.”

Related: Sen. Warren asks Fidelity to address the risks to put Bitcoin in 401(k)s

Fidelity is a multinational finance corporation that provides brokerage services, mutual funds management, investment advice and retirement services and is the fourth largest asset management firm in the world, according to ADV ratings.

Galaxy Digital terminates BitGo acquisition, citing breach of contract

After announcing plans to acquire BitGo in May 2021, Mike Novogratz’s Galaxy Digital has eventually dropped the deal but is still pursuing a listing in the United States.

After more than a year of efforts to acquire the digital asset custodian BitGo, Mike Novogratz’s cryptocurrency investment firm Galaxy Digital has decided to drop the acquisition.

Galaxy has terminated the BitGo acquisition, citing a breach of contract, the firm officially announced on Monday.

According to the statement, Galaxy exercised its right to terminate the deal in line with the acquisition agreement after BitGo failed to deliver audited financial statements for 2021 by July 31, 2022. Galaxy noted that no termination fee is payable in connection with the termination.

As previously reported, Galaxy originally announced plans to acquire BitGo in May 2021 as part of its plans to go public in the United States. Following multiple delays in the acquisition, Galaxy was expected to finalize the transaction by the end of 2022. In April, Galaxy said that it would undertake a $100 million fee in case it fails to acquire BitGo in “certain circumstances” by Dec. 31, 2022.

Despite winding down the BitGo acquisition, Galaxy still continues its path to the U.S. listing on Nasdaq, CEO Novogratz said, stating:

“Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner. We are committed to continuing our process to list in the United States.”

As part of the U.S. listing plans, Galaxy is working to reorganize its operations to become a Delaware-based company. The firm previously expected Delaware domestication to become effective between Q2 and Q4 of 2022, subject to a review process with the U.S. Securities and Exchange Commission.

Related: Argo Blockchain keeps cashing out BTC to pay the debt to Galaxy Digital

Galaxy also remains focused on launching new products including its upcoming offering, Galaxy One Prime. Targeting institutional investors, Galaxy One Prime provides services like trading, lending and derivatives alongside access to qualified custody that integrates “qualified blue-chip custodians.”

Mike Novogratz warns that 200x returns from crypto are ‘not normal’

Former-LUNAtic Mike Novogratz has told crypto investors that the insane returns seen in the crypto space are simply unsustainable.

Mike Novogratz, the billionaire founder of crypto asset management firm Galaxy Digital, has warned that making more than 200X returns on crypto investments is simply “not normal.”

Speaking at the Christie’s Art + Tech Summit in New York on Wednesday, Novogratz warned listeners about the steep volatility of the crypto industry.

“I had friends that had bought lots of crypto, and it had changed their lives — guys who didn’t make a whole lot of money but all of a sudden had a $5 million net worth in crypto,” said Novogratz:

“I shook them and I made them look me in the eye, [and] I said, ‘You have to sell half or two thirds of this, it’s not normal to make 200 times your money on things.’”

He offered further caution, saying that “not everyone is made to be an investor” because greed too often gets in the way of rational thinking.

Novogratz also hasn’t been shy when it comes to handing out criticism of the crypto industry. On Tuesday, he vented his frustrations about the ineptitude and poor practices in the sector that have recently come to light to the attendees of the Bloomberg Crypto Summit.

“It’s frustrating as heck because at times the whole industry looks like a bunch of idiots,” he said.

His newfound disapproval of certain practices within the cryptocurrency space comes less than two months after the Terra ecosystem suffered a catastrophic meltdown, shaving off approximately $50 billion from the digital asset space in the process.

Following the fallout, Novogratz, a vocal advocate of the Terra project who famously inked himself with a moon-themed tattoo, penned an open letter in May, telling his followers: ​​“My tattoo will be a constant reminder that venture investing requires humility.”

While Novogratz may seem more pessimistic than usual, especially when combined with the recent market turmoil, he ultimately believes that blockchain-based technology will gradually become a foundational part of the future of the modern world.

“Over the next decade, Web3 and blockchains will reshape industries, communities and the internet as we know it, blurring the lines between our physical and digital realities,” he said.

Is the bottom in? Raoul Pal, Scaramucci load up, Novogratz and Hayes weigh in

Some high-profile investors have taken the recent market downturn as an opportunity to add to their crypto positions, though others warn there’s still a risk of worse to come.

Some of the highest-profile investors in crypto believe that a crypto market bottom is fast approaching and the timing is right to buy — although one still warns of catastrophic outcomes should prices fall below established support levels. 

Billionaire Mike Novogratz, founder, chairman and CEO of digital asset merchant bank Galaxy Digital Holdings, told a Morgan Stanley conference on Monday that cryptocurrencies may be close to a bottom, with Ether (ETH) likely to hold at $1,000 and Bitcoin (BTC) at around $20,000 to $21,000.

The bottom for crypto would be realized faster than that of United States stocks, which could fall a further 15% to 20%, he said:

“Ethereum should hold around $1,000 and it’s $1,200 right now. Bitcoin is around $20,000, $21,000 and it is $23,000, so you are much closer to the bottom in crypto than you are where I think, stocks, are going to have another 15% to 20% decline.”

Hayes warns of sell-off risk

Arthur Hayes, co-founder and former chief of BitMEX, took a similar view, acknowledging on Twitter on Monday that on-chain data for wrapped Bitcoin (wBTC) and Ether indicated that “liquidations have mostly happened.”

However, Hayes warned that should support levels break for BTC and ETH at $20,000 and $1,000, respectively, we could expect “massive sell pressure in spot markets.”

Pal, Scaramucci loading up 

Macro investor Raoul Pal is taking the recent market downturn as an opportunity to add to his crypto positions. On Tuesday, Pal told his 956,000 Twitter followers that “we are in a buy zone” for Bitcoin, adding he was getting ready to “significantly” add to his crypto positions “probably starting next week and into July.” 

The former Goldman Sachs executive explained that the imminent Bitcoin bottom can also be signaled by the weekly Relative Strength Index (RSI), which is at 31, edging closer to its lowest ever at 28. 

RSI is a metric used by investors to measure the speed and magnitude of price changes, which can indicate overbought or oversold conditions. According to Investopedia, an RSI reading of 30 or below indicates an oversold and undervalued condition.

Pal said his framework frequently expects 60% drawdowns over the long-term time horizons, adding:

“In fact, the best way to optimize returns is to add significantly when the market tests the key trend.”

Anthony Scaramucci, founder of Skybridge Capital, told CNBC’s Squawk Box on Monday that investors should “stay disciplined” amid the crypto slump, noting that his fund has continued adding Bitcoin and Ether into its portfolio.

“With incremental cash coming into our fund we have bought more Bitcoin and Ethereum […] So yes, truth be told, people will look back on this debacle and say I wish I had fresh cash to buy into that.”

Related: ‘Too early’ to say Bitcoin price has reclaimed key bear market support — Analysis

Novogratz was less gung-ho about investing right now, taking a more conservative approach and telling attendees that it may not yet be time to “deploy lots of capital,” as the economy may have further to fall. 

“Until I see the Fed flinch, until I really think, OK the economy is so bad, and the Fed is going to have to stop hiking and even think about cutting, I don’t think it is time to really deploy lots of capital.”

Other metrics that could shed light on whether crypto is nearing its market bottom is the Fear and Greed Index, which as of June 15, is currently sitting at eight, under “Extreme Fear,” which was last seen on May 17, around the time of Terra’s collapse.

Bitcoin is currently priced at $22,061 and ETH is at $1,215 at the time of writing.